M/S. SANTOSH V. SULKE, v. THE ITO WD 24(3)(3), MUMBAI

ITA 2767/MUM/2008 | 2005-2006
Pronouncement Date: 29-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 276719914 RSA 2008
Assessee PAN AGTPS2255G
Bench Mumbai
Appeal Number ITA 2767/MUM/2008
Duration Of Justice 3 year(s) 3 month(s) 7 day(s)
Appellant M/S. SANTOSH V. SULKE,
Respondent THE ITO WD 24(3)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 29-07-2011
Date Of Final Hearing 14-07-2011
Next Hearing Date 14-07-2011
Assessment Year 2005-2006
Appeal Filed On 22-04-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI. BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER I.T.A NO.2767/ MUM/2008 ASSESSMENT YEAR: 2005-06 SANTOSH V SULKE .. APPELLANT SHOP NO.19 GROUND FLOOR ASHOKA SUPER MARKET ROAD S.V.ROAD GOREGOAN(W) MUMBAI. PA NO.AGTPS 2255 G VS INCOME TAX OFFICER 24(3)(3) . RESPONDENT C-11 7 TH FLOOR PRATYAKSHKAR BHAVAN BANDRA KURLA COMPLEX MUMBAI-51. MUMBAI. APPEARANCES: R.C. JAIN FOR THE APPELLANT G.P.TRIVEDI FOR THE RESPONDENT O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL THE ASSESSEE HAS CALLED I NTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 29 TH FEBRUARY 2008 IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 FOR THE ASSESS MENT YEAR 2005-06. 2. IN THE FIRST GROUND OF APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GRIEVANCE: I.T.A NO.2767/ MUM/2008 ASSESSMENT YEAR: 2005-06 SANTOSH V SULKE 2 THE AUTHORITIES BELOW HAVE ERRED IN DISALLOWING/SU STAINING DISALLOWANCE OF CLAIM OF THE APPELLANT TOWARDS DISC OUNT ALLOWED TO THE CUSTOMERS AMOUNTING TO ` . 17 15 846. 3. BRIEFLY STATED THE RELEVANT MATERIAL FACTS ARE L IKE THIS. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DIRECT SALES AGENT OF ICICI BAN K. THE MAIN BUSINESS ACTIVITY CARRIED ON BY THE ASSESSEE IS MARKETING OF CAR LOAN S OFFERED BY ICICI BANK AND IT IS IN THIS PROCESS OF THIS MARKETING ACTIVITY THAT THE AS SESSEE GETS COMMISSION ON THE AMOUNT OF LOAN DISBURSED TO CAR BUYERS. IN THE COU RSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF `.34 31 680 TOWARDS DISCOUNT PASSED ON TO THE CUSTOMERS. IN RE SPONSE TO THE ASSESSING OFFICERS REQUISITION FOR FURTHER DETAILS IT WAS EXPLAINED B Y THE ASSESSEE THAT DUE TO HEAVY COMPETITION IN THE CAR FINANCING BUSINESS THE ASSE SSEE HAD PASSED ON COMMISSION AND DISCOUNT TO THE CUSTOMERS AND THE SUB-AGENTS. THE ASSESSEE HAD ALSO FURNISHED A LIST OF 40 PERSONS TO WHOM THE ASSESSEE HAD PASSED ON THE DISCOUNT. HOWEVER WHEN THE ASSESSEE WAS ASKED TO PRODUCE ANY FIVE PERSONS TO WHOM THE DISCOUNT WAS PASSED ON THE ASSESSEE FAILED TO COMPLY WITH THES E REQUISITIONS. IT WAS IN THE BACKDROP OF THESE FACTS AND HAVING NOTED THAT THE A SSESSEE HAS PASSED ON COMMISSION AS MUCH AS 45 PERSONS OF TOTAL COMMISSIO N RECEIVED THE ASSESSING OFFICER DISALLOWED 50% OF THE CLAIM MADE BY THE ASS ESSEE ON THE GROUND THAT THE ASSESSEE HAS FAILED TO JUSTIFY THE GENUINENESS OF T HIS EXPENDITURE. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A) BUT WITHOUT ANY SUCCESS. THE CIT(A) NOTED THAT THE ASSESSEE ALSO FAILED TO P RODUCE ANY EVIDENCE OF INCURRING SUCH EXPENSES EVEN DURING THE APPELLATE PROCEEDINGS AND THEREFORE IT IS CLEAR THAT THE EXPENDITURE IS NOT SUPPORTED BY ANY DOCUMENTAR Y EVIDENCE. THE CIT(A) HOWEVER NOTED THAT AS PER THE TRADE PRACTICE SOM E DISCOUNTS ARE PASSED ON TO THE CUSTOMERS WHEN THERE IS A COMPETITION IN THE MARKET AND THAT THE AMOUNT ALLOWED BY THE ASSESSING OFFICER I.E. 50% OF THE CLAIM WHIC H WORKS OUT TO ` . 17 15 840 CONSTITUTES MORE THAN 225 OF COMMISSION EARNED BY T HE ASSESSEE. THE CIT(A) WAS THUS OF THE VIEW THAT THE EXPENDITURE ALLOWED BY TH E ASSESSING OFFICER WAS QUITE FAIR AND REASONABLE AND CONFIRMED THE DISALLOWANCE OF TH E REMAINING AMOUNT OF ` . 17 15 840. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. I.T.A NO.2767/ MUM/2008 ASSESSMENT YEAR: 2005-06 SANTOSH V SULKE 3 4. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE A PPLICABLE LEGAL POSITION. 5. WE FIND THAT MATERIALLY IDENTICAL ISSUE CAME UP FOR CONSIDERATION BEFORE A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF HB L GLOBAL PVT LTD VS ACIT IN ITA NO.1687/M/2007:A.Y. 2003-04 AND WHILE DEALING WITH THE ISSUE REGARDING VALIDITY OF DISALLOWANCE OF SUCH EXPENSES THE COORDINATE BENCH VIDE ORDER DATED 29.4.2011 INTER ALIA OBSERVED AS FOLLOWS: 4. THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MARKETING AND PROMOTION OF FINANCIAL PR ODUCTS AND SERVICES SUCH AS CREDITS CARDS AUTOMOBILE LOANS PERSONAL LOANS MERCHANT ESTABLISHMENTS E BROKING ACCOUNTS DEMAT ACCOUNTS LOANS AGAINST SHA RES AND LIFE INSURANCE POLICIES. IN CONSIDERATION OF SERVICES SO RENDERED BY THE ASSESSEE THE ASSESSEE RECEIVES PROFESSIONAL FEES/ COMMISSION ETC. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED OUT OF THE INCOME SO EARNED ON MARKETING AUTO LOANS THE A SSESSEE HAS CLAIMED DEDUCTION OF RS 8 76 49 149 IN RESPECT OF SUBVENTIO N EXPENSES. THIS CLAIM OF SUBVENTION EXPENSES CONSISTED OF RS 92 04 873 AS S UBVENTION EXPENSES CASH AND RS 7 84 44 276 AS SUBVENTION EXPENSES OTHERS. WHEN ASSESSEE WAS REQUIRED TO EXPLAIN NATURE OF THESE EXPENSES I T WAS SUBMITTED BY THE ASSESSEE THAT SUBVENTION EXPENSES IS THE AMOUNT GIV EN TO CUSTOMER OR DEALER FOR AUTO LOAN ARRANGED BY US FOR THE CUSTOMER. THE AMOUNT IS EITHER PAID TO THE CUSTOMER OR DEALER FOR THE BENEFIT OF THE CUSTOMER (CALLED AS CASH SUBVENTION) OR IT IS OFFERED TO THE CUSTOMER THROUGH REDUCTION IN EQUATED MONTHLY INSTALLMENTS (EMIS). IT WAS ALSO EXPLAINED THAT THI S AMOUNT OF SUBVENTION EXPENSES IS ADJUSTED AGAINST THE COMMISSION RECEIVE D BY THE ASSESSEE FOR HDFC BANK LIMITED FOR SOURCING THE AUTO LOANS FOR THEM. IT WAS ALSO EXPLAINED THAT THE EXPENSE HAS BEEN ALLOWED IN THE EARLIER YEARS A S WELL AND IT HAS INCREASED IN THE CURRENT YEAR DUE TO INCREASE IN THE VOLUME O F BUSINESS AND ALSO COMPETITIVE MARKET CONDITIONS. IT WAS ONCE AGAIN EMPHASIZED BY THE ASSESSEE THAT WHAT IS TERMED AS CASH SUBVENTION EXPENSES INF ACT REPRESENTS AMOUNTS PAID BY CHEQUES TO THE CAR DEALER OR TO THE CUSTOME R DIRECTLY WHICH ENDS UP REDUCING THE MARGIN MONEY OUTGO OF THE ASSESSEE. TH E ASSESSEE ALSO EXPLAINED THE MECHANISM OF THESE SUBVENTION PAYMENTS. ALL THI S HOWEVER FAILED TO IMPRESS THE ASSESSING OFFICER WHO REJECTED THE SUBM ISSIONS OF THE ASSESSEE ON THE GROUNDS THAT (A) THE ASSESSEE HAS NOT ESTABLISH ED NECESSITY OF MAKING SUCH PAYMENTS TO THE CAR DEALERS; (B) THE ASSESSEE HAS N OT PRODUCED ANY EVIDENCE THAT ITS CUSTOMERS WANTED SUCH CONCESSIONS; (C) THE ASSESSEE HAS NOT SUBMITTED CONFIRMATIONS EVIDENCING RECEIPT OF SUCH DISCOUNTS; (D) THE ASSESSEE COULD NOT EXPLAIN AS TO WHY RECEIPTS FOR PAYMENTS OF CASH S UBVENTION BY THE ASSESSEE ON I.T.A NO.2767/ MUM/2008 ASSESSMENT YEAR: 2005-06 SANTOSH V SULKE 4 BEHALF OF THE CUSTOMERS WERE IN THE NAME OF THE CU STOMERS AND NOT THE ASSESSEE; (E) THE ASSESSEE COULD NOT EXPLAIN NEED O F CASH SUBVENTION WHEN MECHANISM OF SUBVENTION BY WAY OF REDUCING EMIS WA S ALREADY IN PLACE; (G) THE ASSESSEE COULD NOT EXPLAIN POLICY AND PERCENTAGE OF GRANTING DISCOUNTS BY WAY OF CASH SUBVENTION ; (H) THE ASSESSEE COULD NOT EXP LAIN NECESSITY OF PARTING WITH SUBSTANTIAL PART OF COMMISSION RECEIVED BY THE ASSE SSEE FROM HDFC BANK: AND (I) LACK OF RECEIPTS BY CUSTOMERS TRANSPARENT PROC EDURES AND PROPER DOCUMENTATION. IT WAS IN THIS BACKDROP THAT WHILE T HE ASSESSING OFFICER DID NOT DISTURB THE CLAIM OF SUBVENTION EXPENSES OTHERS I.E. BY REDUCING EMIS THE ASSESSING OFFICER REJECTED ENTIRE CLAIM OF DEDUCTIO N IN RESPECT OF SUBVENTION EXPENSES CASH AMOUNTING TO RS 92 04 873. AGGRIEV ED ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. THE CIT(A) REITERATED THE STAND OF THE ASSESSING OFFICER NOTE D THAT OVERALL EXPENDITURE OF THE ASSESSEE IS VERY HIGH RESULTING IN LITTLE PROFI TS AND ALSO INTER ALIA OBSERVED AS FOLLOWS : .KEEPING IN VIEW OF NATURE OF BUSINESS AND ITS C ONNECTION WITH HDFC BANK LIMITED THE CLAIM OF EXPENDITURE OF 99.97% OF RECE IPTS SEEMS HIGHLY ABNORMAL AND EXAGGERATED. IT IS ALSO RELEVANT TO STATE THAT EXPENDITURE CLAIMED IN AY 2002-03 THE PRECEDING YEAR CONSTITUTES 96.36% OF TOTAL RECEIPTS. IN OTHER WORDS EXPENDITURE HAS GONE UP BY 3% WITHOUT ANY OS TENSIBLE REASONS. IN VIEW OF THE ABOVE IT APPEARS THAT APPELLANT HAS EXAGGER ATED ITS EXPENDITURE NOT SUPPORTED BY EVIDENCE AND THEREFORE CASH SUBVENTI ON EXPENSES OF RS 92 04 873 HAVE RIGHTLY BEEN DISALLOWED BY THE ASSES SING OFFICER. 5.. `6. 7 WE FIND THAT THE ASSESSEE IS USING SUBVENTION EXPENSES AS AN ADDITIONAL INCENTIVE OUT OF THE COMMISSION RECEIV ED BY THE ASSESSEE TO MARKET THESE AUTOMOBILE LOANS WHICH HAS A HIGHLY C OMPETITIVE MARKET. AS WE UNDERSTAND ON THE BASIS OF ANALYSIS OF MATERIAL AND SUBMISSIONS BEFORE US THE INTEREST RATE OFFERED BY THE BANK ON SUCH AUTOMOBIL E LOANS REMAINS THE SAME IN ALL CASES BUT AS A MARKETING AGENT OF THE BANK AN D TO MEET THE COMPETITION THE ASSESSEE PARTS WITH A PART OF ITS COMMISSION WITH T HE CUSTOMERS. THIS IS TERMED AS SUBVENTION EXPENSES AND IS DONE IN TWO WAYS F IRST BY OFFERING REDUCED EMIS AND THUS REDUCING THE EFFECTIVE RATE OF INTER EST PAID BY THE CUSTOMER : AND - SECOND BY WAY OF MAKING A PAYMENT TO THE A UTOMOBILE DEALER OR THE CUSTOMER AND THUS REDUCING EFFECTIVE DOWN PAYMENTS . DEPENDING ON WHATEVER ITS CUSTOMERS PREFER A LOWER EMI OR A LOWER DOWN P AYMENT SUBVENTION IS PAID BY WAY OF REDUCED EMI OR PAYING A PART OF DOWN PAYM ENT TO THE DEALER OR THE CUSTOMER. AS FAR AS SUBVENTION BY WAY OF LOWER EMI IS CONCERNED WHICH IS ALMOST NINETY PERCENT OF THE TOTAL SUBVENTION EXPEN SE THE ASSESSING OFFICER HAS ALLOWED THE SAME. THERE IS NO GOOD REASON THUS TO D ECLINE THE CLAIM OF SUBVENTION EXPENSES IN PRINCIPLE. WHAT HAS BEEN TER MED AS CASH SUBVENTION I.T.A NO.2767/ MUM/2008 ASSESSMENT YEAR: 2005-06 SANTOSH V SULKE 5 EXPENSES IS A MISNOMER INASMUCH AS THERE IS NO CASH PAYMENT INVOLVED AND IS ONLY A DIRECT FORM OF PAYMENT OF SUBVENTION EXPENSE S. WE FIND THAT THIS PAYMENT IS MADE DIRECTLY TO THE AUTO DEALER AND IS MADE AS ON BEHALF OF THE CUSTOMERS IN RESPECT OF DOWN PAYMENT FOR THE AUTOMO BILE AND IT IS FOR THIS REASON THAT THE RECEIPT IS IN THE NAME OF THE CUSTO MER. THE PAYMENT IS MADE THROUGH BANKING CHANNELS BUT IS MADE ON BEHALF OF T HE CUSTOMER AND AS A PART PAYMENT OF DOWN PAYMENT AND IT IS FOR THIS REASON THAT THE RECEIPT IS MADE OUT IN THE NAME OF THE CUSTOMER. THEN PAYMENTS ARE PROP ERLY DOCUMENTED AND ARE LINKED TO THE SPECIFIC CUSTOMERS AND IN RESPECT OF SPECIFIC FINANCE TRANSACTIONS. IT IS FOR THE CUSTOMERS OF THE ASSESSEE TO DECIDE A S TO WHICH FORM OF SUBVENTION THEY PREFER AND MERELY BECAUSE THE ASSESSEE HAS A F ORM OF SUBVENTION I.E. BY WAY OF REDUCTION OF EMIS IT CANNOT BE SAID THAT TH ERE WAS NO NEED OF OTHER FORMS OF SUBVENTION EXPENSES. THESE ARE MATTERS OF COMMERCIAL EXIGENCIES AND THE ASSESSEE IS THE BEST PERSON TO DECIDE HOW SHOUL D HE RUN HIS BUSINESS. 6. IN THE CASE OF HBL GLOBAL PVT.LTD (SUPRA) THE D ISCOUNT PASSED ON WAS SUBVENTION EXPENSES BUT IN EFFECT IT WAS THE SAME I N NATURE AS IS COMMISSION PASSED ON BY THE ASSESSEE ON THE FACTS OF THIS CASE. IT T HEREFORE APPEARS THAT SO FAR AS THE ALLOWABILITY OF DISCOUNT PASSED ON TO THE CUSTOMERS IN PRINCIPLE IS CONCERNED THE ASSESSING OFFICER IS CLEARLY IN ERROR IN DISALLOWIN G THE SAME. THE PAYMENTS MADE ON ACCOUNT OF COMMISSION PASSED ON ARE PROPERLY DOCUME NTED AND LINKED TO THE SPECIFIC CUSTOMERS AND SPECIFIC FINANCE TRANSACTION AS PER T HE DETAILS FURNISHED TO THE AUTHORITIES BELOW AND WHICH HAVE ALSO BEEN PLACED B EFORE US. THE MERE FACT THAT THE ASSESSEE IS NOT ABLE TO PRODUCE THE PERSONS TO WHOM THIS COMMISSION IS PASSED ON CANNOT BE A REASON ENOUGH FOR DISALLOWING THE EXPEN DITURE. ONCE THE ASSESSEE HAS FURNISHED ALL THE REQUISITE PARTICULARS OF THE PERS ONS TO WHOM THE COMMISSION IS PASSED ON NOTHING PREVENTED THE ASSESSING OFFICER TO VERIFY IF HE SO WANTED TO VERIFY THE ACTUAL FACTS REGARDING THESE PAYMENTS. WE HAVE ALSO NOTED THAT IN THE PRESENT CASE THE ASSESSING OFFICER HAS NOT DISALLO WED ENTIRE EXPENDITURE BUT HAS ONLY DISALLOWED A PART OF THE EXPENDITURE WHICH HE CONSIDERED TO BE EXCESSIVE OR UNREASONABLE. IT IS ONLY ELEMENTARY THAT IT IS NOT FOR THE ASSESSING OFFICER TO SIT IN JUDGEMENT OVER HOW SHOULD THE ASSESSEE CONDUCTS HIS BUSINESS. WHETHER THE ASSESSEE SHOULD PASS ON 47% OF THE COMMISSION AS H E HAS PASSED IN THE PRESENT CASE OR WHETHER PASSING ON OF 22% OF THE COMMISSI ON EARNED IS REASONABLE IS NOT AN AREA WHERE AUTHORITIES BELOW SHOULD DEVOTE THEIR ATTENTION. AS A MATER OF FACT AS I.T.A NO.2767/ MUM/2008 ASSESSMENT YEAR: 2005-06 SANTOSH V SULKE 6 EVIDENT FROM HBLS CASE (SUPRA) EXPENDITURE CLAIM OF OVER 90% WHICH MAINLY CONSISTED OF DISCOUNTS TO CUSTOMERS HAS BEEN ALLOW ED AS DEDUCTION. IT IS THEREFORE NOT FAIR TO PROCEED ON THE BASIS THAT 47% DISCOUNT BEING PASSED DUE TO THIS QUANTUM ALONE IS UNREASONABLE. HOWEVER THAT IN PRECISELY WHAT THE ASSESSING OFFICER HAS DONE ON THE FACTS OF THIS CASE-AND THE SAID ACTION HAS BEEN UPHELD BY THE CIT(A) AS WELL. HAVING NOTED THE FACT THAT THE ISSUE BEFORE US IS CONFINED TO WHETHER THE COMMISSION BEING PASSED ON TO THE CUSTOMERS SHOULD BE ALLOWED TO THE EXTENT OF 22% OF TOTAL COMMISSION EARNED AND NOT 47% OF THE T OTAL COMMISSION EARNED AS CLAIMED BY THE ASSESSEE WE ARE OF THE CONSIDERED V IEW THAT THE AUTHORITIES BELOW ERRED IN RESTRICTING THE PAYMENT OF COMMISSION ON T HE BASIS OF WHAT THEY PERCEIVED AS REASONABLE QUANTUM. WE THEREFORE DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWANCE. THE ASSESSEE GETS RELIEF AC CORDINGLY. 7. GROUND NO.1 IS THUS ALLOWED. 8. IN GROUND NOS.2 & 3 THE ASSESSEE HAS RAISED THE FOLLOWING GRIEVANCES: 2. THE AUTHORITIES BELOW HAVE ERRED IN DISALLOWING SUSTAINING DISALLOWANCE OF CLAIM OF THE APPELLANT TOWARDS RTO EXPENSES AMOUNTING TO ` ..4 78 331. 3. THE AUTHORITIES BELOW HAVE ERRED IN DISALLOWING SUSTAINING DISALLOWANCE OF CLAIM OF THE APPELLANT TOWARDS INSU RANCE CHARGES AMOUNTING TO ` . 4 89 829. 9. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED RTO EXPENSES OF RS. 4 78 331 A ND INSURANCE FOR COSTUMERS CARS OF ` . 4 89 829 IN THE PROFIT AND LOSS ACCOUNT. IT WAS EXPLAINED BY THE ASSESSEE THAT THESE EXPENSES HAVE BEEN INCURRED AS PART OF SALES PROMOTION BUT COULD NOT PRODUCE ANY EVIDENCE OF THE EXPENSES HAVING ACTUALLY BEEN INCURRED. IT WAS FOR THIS REASON THAT THE RTO EXPENSES OF RS4 78 331 AND INSURANCE C HARGES AMOUNTING TO ` .4 89 829 WERE DISALLOWED BY THE ASSESSING OFFICER. WHEN THE MATTER WAS CARRIED ON IN APPEAL BEFORE THE CIT (A) THE CIT(A) TOOK NOTE OF ASSESSE ES CONTENTION THAT THESE EXPENSES WERE INCURRED FOR THE PURPOSE OF CLIENTS BUT CONFIR MED THE DISALLOWANCE ON THE I.T.A NO.2767/ MUM/2008 ASSESSMENT YEAR: 2005-06 SANTOSH V SULKE 7 GROUND THAT THE ASSESSEE DID NOT PRODUCE ANY EVIDE NCE OF INCURRING SUCH EXPENSES EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PE RUSED THE MATERIAL AVAILABLE ON RECORD. WHILE WE AGREE WITH THE CONTENTION OF THE ASSESSEE THAT IN PRINCIPLE AND AS LONG AS THE EXPENSES ON ACCOUNT OF REGISTRATION OF CAR AND INSURANCE OF CAR ARE INCURRED AS AN INCENTIVE TO THE CUSTOMERS THE SAME SHOULD BE ALLOWED AS DEDUCTION. WE HAVE ALSO NOTED THAT THE ASSESSEE HAS NOT FURNIS HED ANY DETAILS OR EVIDENCE OF SUCH EXPENSES HAVING ACTUALLY BEEN INCURRED. IN TH E ABSENCE OF ANY EVIDENCE OF EXPENSES THE CLAIM FOR EXPENSES CANNOT BE ALLOWED. WE THEREFORE UPHOLD THE ACTION OF THE AUTHORITIES BELOW. 11. GROUND NOS.2 & 3 ARE THUS DISMISSED. 12. IN THE RESULT APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 29 TH JULY 2011 SD/- (VIJAY PAL RAO) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI DATED 29 TH JULY 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS) XXIV MUMB AI 4. COMMISSIONER OF INCOME TAX 24 MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH E MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI